A cross-functional team of managers, including the management accountant, performed each of the following activities. However, depending on the nature of the decision to be made, one functional area will take the leadership role. Which of these activities is primarily a production decision? What would the management accountant contribute to each of the production decisions?
1. Saab Automobile AB must decide whether to buy a part for one of its cars or to make the part at one of its plants.
2. Boeing Company must decide the price for spare parts it sells over the Internet using its Spare Parts Web site.
3. St. Mary’s Hospital must decide how to finance the purchase of expensive new medical analysis equipment.
4. Amazon.com must forecast how a new advertising program will affect DVD sales.
5. Mission Foods, a leading producer and distributor of tortillas to retail and food service industries, must decide whether to accept a special order for tortilla chips by a large, national retail chain.
6. Kmart must evaluate its overall vision and strategic goals in the light of competitive pressures from Target, Sears, and Wal-Mart.
7. Dell Computers must decide whether to spend money on training workers to perform setups and changeovers faster. This will free up capacity to be used to make more computers without purchasing more equipment.
8. Ford Motor Company must decide whether to keep or replace 4-year-old equipment used in one of its Escape plants.